The analysis of colorectal carcinomas suggests that deregulation of the Wnt pathway is an essential step in their malignant transformation. Understanding the regulation of this pathway may therefore lead to improved prevention and treatment of human carcinomas. One crucial function of the Wnt pathway in the colon is to regulate beta-catenin-dependent transcription via a phosphorylation-regulated signal transduction pathway. Although several kinases have been shown to regulate the Wnt pathway, no phosphatase has previously been clearly identified as a component of this pathway. Our data show that the B56 regulatory subunits of protein phosphatase 2A (PP2A) interact with the adenomatous polyposis coli (APC) protein, and that B56 overexpression causes decreased beta-catenin abundance, leading to decreased beta-catenin-dependent gene expression in mammalian tissue culture cells and Xenopus embryo explants. The overexpression of B56 appears to activate the phosphorylation-dependent, proteasome-mediated, degradation of beta-catenin. In addition, the phosphatase inhibitor okadaic acid causes increased levels of beta-catenin, as would be expected if PP2A inhibited Wnt signaling. Our results suggest, therefore, that the B56-containing PP2A holoenzyme is a key regulator of a Wnt signal transduction pathway. The objective of this proposal is to define the precise role of B56 and PP2A in the Wnt signal transduction pathway and the development of intestinal cancers. We propose to (1) identify critical Wnt pathway components that are PP2A:B56 substrates, (2) determine with which additional components of the pathway B56 interacts, (3) test if Wnt propagates its signal in part by regulating PP2A:B56 activity, and (4) use transgenic mice to test the hypothesis that overexpression of B56 suppresses colon carcinogenesis, while dominant-negative B56 alleles promote it.